On Monday, the 4th of March, Tether announced that it is issuing USDT on the TRON blockchain. As Tether wrote in its blog post on this subject, the USDT, based on the TRC20, enables interoperability with protocols and decentralized applications or dApps on TRON, while permitting users to transact, as well as exchange fiat pegged currencies all over the network of TRON.
Tether issues its new stablecoin on TRON
TRON is just the third blockchain on which Tether issues its stablecoin. Later in 2018, several actions by Tether Limited got people thinking that perhaps the company has been exiting the market altogether. For another, they have been quietly arbitraging, as well as retiring USDT from circulation.
However, the news about the expansion of TRON dovetails with a rebounding market capitalization, which in the past 30 days spiked above 2.1 billion at one particular point. The market cap of Tether signifies the trust in its stability, as well as the state of the market. A lot of traders stash funds in stablecoins when markets are uncertain because they were in recent times.
This news also occurred at the time when Tether posted as positive peg wherein Tether at press time was trading for only 1 cent over its S1 target. That actually means demand is outpacing supply on a few exchanges.
The exchanges that did most of the volume on USDT are BitMax, CoinBene, and EXX. Interestingly, the most active market at that time was Paxos Standard and USDT, with about 10% of the total volume. However, are people exiting PAX and entering USDT? PAX has lost about $5 million over the last seven or more days, that much is for sure.
This probably looks at the problem too closely.
Why not EOS and NEO but TRON?
For its own part, TRON gained 3% against BTC in 24 hours. The base token of the highly popular blockchain was in the 2-cent range for some time. Its all-time high has been over 25 cents not long after it was launched in 2017.
While it was consistently a top-10 crypto asset by market cap, TRON also owes this fact to its abundant supply. The token suffered as severely as others throughout the crypto winter. Litecoin stands apart from them like a coin which seems to have gained during these periods.
The decision about listing Tether on TRON raised a question: why not EOS and NEO? As long as we make Tether available on blockchains besides the #1 and #2, there are a lot of communities which may utilize the stablecoin for several aims. Moreover, Block.one founding partner, named Brock Pierce, has also co-founded Tether. Maybe the decision speaks to the ejection of EOS of Pierce?
Tether is dominant, and it will be in the near future
Stablecoins actually introduce new dynamics into the cryptocurrency markets which required a wait-and-see approach. Almost 100 projects around the stablecoin idea were started, but less than a dozen appear to have hopes of success.
It is a low-margin game for the issuers of these assets. Introducing fiat liquidity into the cryptocurrency markets instantly breaks down borders. In theory, a user of Bitcoin in Iran may hold USD all day with the use of the Omni version of USDT. This also goes for Ethereum, with a certain degree of lessened privacy.
The news even tells us one thing. Tether is alive, and also well. The position of Tether is dominant, and it will not change shortly, but the next big crypto bull-run might shake the things up as the traders will decide between the different options which include TrueUSD, USDC, Paxos, and Tether.